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Last Friday at 5:00 p.m. (which he’s apt to do when releasing bad news), San Francisco Mayor Gavin Newsom vetoed three pro-tenant ordinances designed to help renters facing hard times.  He even nixed a relatively mild proposal to limit “banked” rent increases to 8% – despite this being consistent with existing policies at the Mayor’s Office of Housing.  Newsom’s record on tenant issues in San Francisco has always been bad, and his latest act does not bode well for next year’s statewide elections.  California’s 14 million renters need a champion in the Governor’s Mansion after six years of a hostile Republican Administration, but Newsom currently only has one opponent for the Democratic primary – California Attorney General Jerry Brown.  Based on his record as Mayor of Oakland, Brown can be counted on to be just as anti-tenant – if not worse – than Newsom.  There is no excuse why a deep blue state like California can’t have a pro-tenant Governor, and the current field of Democratic candidates creates an opening for a new person to jump into the fray.

Sacramento Politics Out of Step With Renters

When Schwarzenegger became Governor in 2003, the tenants’ rights agenda in the State Captiol – which had made some progress in the Gray Davis years – came to a grinding halt.  Arnold owns rental property in Santa Monica, and made it clear from the very start that he views California law as too “pro-tenant.”  Besides the legislative victory of 60-day notices for “no-fault” evictions, renters have made virtually no progress in Sacramento ever since.

And it has been a nightmare.  The Governor has vetoed legislation to help tenants in foreclosed properties, and single-handedly killed the renters’ tax credit.  We can’t get the state legislature to pass desperately needed Ellis Act reform, because too many Democrats are afraid of angering realtors in their districts – if they know Schwarzenegger would not sign the bill into law anyway.  We are at a standstill.

For a state whose voters soundly defeated Proposition 98 last year, there is no excuse why we can’t have a pro-tenant Governor.  A wide coalition opposed Prop 98 (it was so extreme that even Pete Wilson and the Chamber of Commerce opposed it), but polling throughout the campaign repeatedly showed a majority of Californians support rent control – suggesting we should be making more progress.

Unfortunately, neither of the two Democratic candidates for Governor are pro-tenant.

San Francisco Mayor Gavin Newsom

San Francisco tenant activists know that throughout his career, Gavin Newsom has not been an ally.  Newsom was a landlord when he served on the Board of Supervisors, and the City’s conflict-of-interest rules prevented him from taking a stand on many pro-tenant ballot measures.  But his consultant, Eric Jaye, made his mark in June 1998 by running the unsuccessful campaign to pass Prop E – which would have repealed rent control and eviction protections for owner-occupied buildings with four units or less.

In 2001, Newsom was one of three Supervisors to vote “no” on Jake McGoldrick’s T.I.C. legislation – which was designed to curb Ellis Act evictions.  In 2002, he signed the main ballot argument for Prop R – the measure that would have resulted in mass condominium conversions.  The SF Tenants Union prioritized its defeat, and Prop R lost by 20 points.

As Mayor, Newsom has vetoed most pro-tenant measures.  In 2004, he vetoed the Housing Preservation Ordinance – which stopped the mass demolition of rent-controlled properties.  In 2006, he vetoed two measures designed to curb Ellis Act evictions: (a) one that would have allowed the Planning Commission to weigh in on such cases, and (b) one requiring real estate brokers to disclose a prior Ellis Act eviction to potential T.I.C. buyers at open houses.  The voters passed the latter ordinance in the next election, a “veto override” that remains law today.

But Newsom has been willing to do the right thing – if it serves his political purposes.  In 2006, he signed into law a measure that effectively halted condo conversions on buildings with a prior Ellis eviction.  He also let an ordinance preventing landlords from arbitrarily taking away services become law.   Newsom did this because: (a) tenant activists effectively publicized an eviction epidemic and (b) Supervisor Bevan Dufty – who had been the fourth vote to sustain the Mayor’s vetoes – was up for re-election, and he hoped to deter a serious challenger.

What does this prove?  Newsom may not be “pro-tenant” – but if renters organize to shift the political dynamics, they can occasionally push him to respond.  A Governor Newsom would probably not advance legislation to curtail the Ellis Act or strengthen rent control, but by working with friendly Democratic legislators tenants could score the rare victory.

It’s instructive to see what occurred in San Francisco after tenant issues died down in prominence.  Besides vetoing the “renters’ relief” package, Newsom is pushing a very dangerous idea to fast-track thousands of condo conversion applications.  Billed as a way to “raise revenue” for the City’s coffers, the measure would encourage more Ellis Act evictions down the road – and cannibalize our rental housing stock.  Newsom even ditched recent City budget talks to meet at Medjool’s with the pro-gentrification group Plan C to discuss this proposal.

Newsom opposed Proposition 98.  At the time, he said it would “effectively gut local land use planning and severely weaken environmental protections,” and a “disaster for cities and counties.”  But now, his gubernatorial campaign has taken $25,000 from Thomas Coates – a real estate investor who gave one million dollars to the Prop 98 effort.  Expect landlords and realtors to heavily fund Newsom’s gubernatorial campaign.

California Attorney General – and former Oakland Mayor – Jerry Brown:

Progressives who remember when Jerry Brown was Governor – from 1974 to 1982 – are inclined to believe he would be pro-tenant, and thus better than Gavin Newsom.  And it’s true that in 1976, he vetoed AB 3788 – which would have pre-empted rent control in California.  (Other states were not so lucky, where the legislatures have forbidden cities from doing so.)  But Brown waited until the very last minute to veto the legislation, and it was a very tough call what he’d do – he opposed blanket preemption of local governments, but was against rent control.

Brown is notorious for being quirky and unpredictable, and his politics have drastically changed over a very long career.  Therefore, it’s not very helpful to look at his career as Governor in the 1970’s and 80’s.  A more accurate prediction is to see where he’s been since 1998 – when he made a political comeback by getting elected Mayor of Oakland.

If Gavin Newsom has been a bad Mayor for tenants, Jerry Brown was a real nightmare.  Oakland had rent control, but no “just cause” protections – which meant a landlord could simply ask a tenant to leave in thirty days for no reason at all.  In the late 1990’s, as the dot-com boom gentrified Oakland (and Brown promoted massive downtown real estate development), tenants pushed for a “just cause” ordinance.  When the measure qualified for the 2002 ballot, Brown vehemently opposed it – but the voters passed it, after a tough campaign.  In 2004, Brown campaigned against pro-tenant Councilwoman Nancy Nadel.

During the mass real estate boom of the Brown years, Oakland had no inclusionary housing ordinance – which meant that private developers were not required to build any “below-market rate” units.  Brown resisted any efforts to impose modest requirements, and his final act as Mayor in 2006 was to veto an inclusionary ordinance.  In contrast, San Francisco passed an inclusionary ordinance in 2001 – which over the years has been strengthened to have higher affordability levels.  Supervisor Gavin Newsom voted for it.

As Oakland Mayor, Brown was an unapologetic cheerleader of condo conversions – even if it displaced tenants.  In November 2006, City Councilman Ignacio De La Fuente – who had been Brown’s endorsed candidate for Mayor to replace him that year – proposed such legislation, and attempted to pass it in a hurry while Brown was still in office.  This effort, however was thwarted by Mayor-elect Ron Dellums.  Brown’s position is disturbing, given that real estate speculators are taking the fight to Sacramento.  Would a Governor Brown sign state legislation that preempts cities from passing restrictions on condominium conversions?

As far as I can tell, Jerry Brown never took a stand on last year’s Proposition 98 to ban rent control – even though practically everyone else opposed it.  It cannot be because Brown was California Attorney General – since that didn’t stop him from opposing other propositions.  But Brown used his position as Attorney General to write the measure’s official ballot title, and opted not to mention that Prop 98 would abolish rent control in California.  A couple tenant groups sued him for an abuse of discretion, but a judge refused to require Brown to re-write it.

Can a “Pro-Tenant” Democrat Win the Governor’s Race?

Gray Davis was not exactly a “pro-tenant” Democrat, but as Governor he signed bills that the state legislature passed – such as (a) one-year Ellis eviction notices for seniors and the disabled, (b) strict habitability standards, (c) restrictions on re-renting property that had been Ellised, (d) exempting residential hotels (SRO’s) from the Ellis Act, and (e) 60-day notices for “no-fault” evictions.  The latter law expired in 2005, and it took two attempts by tenant advocates in the Schwarzenegger years to successfully have it re-instated as permanent.

It is questionable if Governors Gavin Newsom or Jerry Brown would sign such bills into law.  As for Brown, there is an added danger that he could even enact laws that would be a step backwards for tenants.  But there are “pro-tenant” Democrats in California who could get elected Governor – if they bothered to run.  Antonio Villaraigosa bowed out of the race, which is unfortunate – given his track record as Los Angeles Mayor at enacting some good legislation.  Time is running out on politicians to enter the Governor’s race.  Will anyone else jump in??

EDITOR’S NOTE: Paul Hogarth was an elected Commissioner on the Berkeley Rent Stabilization Board from 2000 to 2004, and has been a tenant activist for years.  He is now a tenants’ rights attorney living in San Francisco, and is the Managing Editor of Beyond Chron, where this piece was first published.

Originally posted to Paul Hogarth on Mon Jul 13, 2009 at 10:19 AM PDT.

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Comment Preferences

  •  Thanks for summarizing these issues (6+ / 0-)

    It's is much easier to assimilate this digest than having to hunt all over for disparate bits of relevant news.

    Republicans: YOU'RE the PROBLEM, WE'RE the SOLUTION.

    by dagnome on Mon Jul 13, 2009 at 10:38:59 AM PDT

  •  Rent Control is a staggeringly terrible idea (4+ / 0-)
    Recommended by:
    VClib, Onyx, in the Trees, Pender

    In the words of socialist economist Assar Lindbeck,

    In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.

    You would be hard-pressed to find another issue where there is more consensus from the entire economics profession than rent control - we are talking 95+%.  Think climate change-level consensus.  

    While rent control begins with good intentions - "rents are high, we should do something to help tenants" - it is astonishingly counterproductive.  Since people do not leave rent-controlled housing, the normal housing turnover is reduced.  New entrants to the market have to find their way into the non-controlled segment; since rent control reduces the incentive to build any sort of rental housing, there are comparatively few non-controlled units and the price per non-controlled unit is high.  Which causes people who do have rent control to fight all the harder to maintain and expand their government benefit.

    Far better would be to simply subsidize housing for residents who need the help.  Unlike rent control, this could actually be means-tested so the benefits are targeted to the people who need it.  But that would point out the big lie of rent control: in the name of protecting the little guy, it really helps the politically powerful who got there first and hurts the little guy who is forced into the non-controlled market.

    •  Even when a rent controled unit becomes available (2+ / 0-)
      Recommended by:
      Pender, Taunter

      the little guy gets screwed. You have a 3 bedroom apartment up for rent and there's 2 people interested in the apartment that rents for 700 a month. One person interested has a family of 4 (spouse+2 children) making 40k a year. The other's a childless couple making over 150k a year. Who is the landlord going to give the lease to?

      All rent control does is subsidise rent for the more affluent at the cost of the people it was intended to help.  

    •  Rent control and policies to prevent gouging are (4+ / 0-)
      Recommended by:
      Pd, justiceputnam, Areopagitica, trumpeter

      different things.

      You shouldn't be able to jack up the rent 8% in a year.  That's just not right.

      I won't even tell you how much we pay in rent for a house in the OC, because you would laugh at me for being a sucker.  The rental market was incredibly tight when we needed a house, so we're paying an exorbitant amount for a house that is a piece of shit.  I occasionally have sewage backing up into my kitchen sink.  The landlord refuses to to the big fix.  She just keeps calling the plumber to snake the corroded, old pipes.

      And I try not to complain too much because I want my security deposit back, which of course was substantial.

      Owning a house turned into a nightmare due to a collapsed housing market in California, and now renting is turning out to have problems of it's own.

      I shouldn't have to live in fear of my rent increasing dramatically from it's already outrageous rates, nor should I have to live in a POS house because I'm having a security deposit held over my head.

      "It is what it is."

      by coquiero on Mon Jul 13, 2009 at 11:15:41 AM PDT

      [ Parent ]

      •  Rent stabilization is different from rent control (1+ / 0-)
        Recommended by:
        coquiero

        Rent stabilization laws can be a good idea, I think,  but they should not operate to prevent equilibrium pricing over the long term. They're good only for cushioning the impact of rent increases over a short term. Basically they should create a 1-2 year delay cushion for extremely large spikes in rent so that people have time to look for a new home if necessary -- not so they can keep the same home without paying market-rate rents.

      •  Why not? (0+ / 0-)

        Actually, a landlord should be able to raise the price of housing 8% (or 80%, or 800%) and you should have the right to move out and take your security deposit with you.

        What stops landlords from charging infinite rent is quite simply that people will not pay it.

        •  You sound like (0+ / 0-)

          Phil "Let the market regulate itself and quit whining" Gramm.

          "It is what it is."

          by coquiero on Mon Jul 13, 2009 at 12:49:42 PM PDT

          [ Parent ]

          •  Or Marie Antoinette = "Let them eat cake." (n/t) (1+ / 0-)
            Recommended by:
            coquiero
            •  He's saying nothing of the sort (0+ / 0-)

              Since when does anyone of any economic status have the right to live in any house in anywhere of his/her choosing?

              The answer is never. The right to life means the right to sustain your life through your own efforts and no one is allowed to kill you, not that your neighbors are obligated to feed, clothe, and house you. Otherwise, they have no liberty or right to the fruits of their labor.

          •  Oh please (0+ / 0-)

            Rent controls have never worked, and never will, unless your intention is to destroy a city. As the former foreign minister of Vietnam said, Hanoi succeeded at what Americans didn't: destroying the city. What was the culprit? Very low rents. Let's think about this for a second: what are the upper and lower bounds for the landlord and tenant of any rent?

            Landlord: Upper bound is infiniti, lower bound is the total cost of owning the unit

            Tenant: Lower bound is zero, upper bound is the next best alternative

            So the upper and lower bounds of any rent is the next best alternative for the tenant, and the total cost of owning the unit, respectively. Somewhere in the middle is the rent agreement. The only fair agreement

            Rent control is unnecessary, wrong, and counterproductive, and I could write for pages why

    •  Rent controll is a tough issue (1+ / 0-)
      Recommended by:
      Pris from LA

      It certainly makes capital improvement projects harder to justify and does skew the market in favor of older, established renters. But it also does a lot of very important things.

      First, there is a whole class of working families in San Francisco who would not be able to live in the city without rent control. These are people like teachers, small business owners, civil servants, folk who work for nonprofits, restaurant workers, etc... The kind of folk who actually make a city function. My aunt and uncle, city teachers, would never be able to live in a reasonably sized apartment were it not for their rental protections.

      Rent control laws also help to build stable neighborhoods - when you're faced with the specter of eviction every year it's impossible to really settle down, this goes double for those with children (moving children from house-to-house every year, not knowing if they can stay in the same school district, and moving them away from their friends is not necessarily a social good). This does a number of things to renters including, relevant for this site, significantly lower their political clout as compared to owners. Which is a shame, because renters already have the deck stacked against them in a number of ways.

      Also, when I was looking at housing in SF I had no problem finding a rent-controlled unit with rents that were substantially less than those of nearby non rent-controlled units.

      I'm open to ways that we can make rent control means-tested or otherwise minimize the "subsidize the wealthy" portions of control, but I value safe and stable families and neighborhoods more than I value elegant economic theories.

      •  No it's not. (2+ / 0-)
        Recommended by:
        VClib, Taunter

        It's the most open-and-shut, black-and-white issue in all of economics that nevertheless persists in causing controversy because it presents the opportunity for some people to get something at others' expense.

        First, there is a whole class of working families in San Francisco who would not be able to live in the city without rent control. These are people like teachers, small business owners, civil servants, folk who work for nonprofits, restaurant workers, etc... The kind of folk who actually make a city function.

        Setting aside the last line, which as far as I can tell is pure Palin-style "real-American" crap, there is no reason that people who cannot afford to live in a desirable neighborhood can commute there if necessary, particularly in an area like SF where there is readily available transportation. And if there is some reason that is not true, and those people are in fact essential to the functioning of the city, then their employers will pay them more so that they do not quit and move somewhere where they can afford the cost of living.

        Also, when I was looking at housing in SF I had no problem finding a rent-controlled unit with rents that were substantially less than those of nearby non rent-controlled units.

        If this is true as a general matter, why would anyone ever live in non-rent-controlled units?

        but I value safe and stable families and neighborhoods more than I value elegant economic theories.

        First, to the extent that rent control has anything to do with the safety of a neighborhood, it cuts in the opposite direction, since less rent control means richer inhabitants means a higher tax base means better police. Second, "elegant economic theories" in this case means only a recognition of micro economics 101 -- like, the literal entry-level course taught in nearly every accredited college -- in which you learn the little supply-demand lines and the triangle of dead-weight loss created by an artificial price ceiling. Dismissing an insight as basic as that as "elegant economic theories" is like being a Creationist waving his hands about all the "crazy scientist mumbo-jumbo."

        •  Urm... (1+ / 0-)

          there is no reason that people who cannot afford to live in a desirable neighborhood can commute there if necessary

          I think fostering economic policies that encourage income-stratified neighborhoods (ghettos) and long commutes runds counter to the social good. And, as an aside, have you ever taken muni for a day job? Unless your commute goes straight down Market it's not a terribly viable option.

          If this is true as a general matter, why would anyone ever live in non-rent-controlled units?

          Viking ranges. People don't act as 'rational economic actors.' Especially when they're choosing something so dear as a home.

          First, to the extent that rent control has anything to do with the safety of a neighborhood, it cuts in the opposite direction, since less rent control means richer inhabitants means a higher tax base means better police

          That's great! Except that it effectively means that rich folk get safe neighborhoods while poor folk live in dangerous ghettos. I don't think this is good for society. Apparently you're okay with it.

          Does rent control skew supply-and-demand? Sure. Does it benefit some at the expense of other? Sure. But I'm not convinced that that's a problem big enough to outweigh the social good that it does. There are all sorts of policies that governments implement that screw with supply and demand.

          •  Income-stratified (0+ / 0-)

            neighborhoods? You mean rent controls? That would be what causes it. It's not about housing security, it's about housing inflexibility. If I own a 7-bedroom apartment, all my kids have long moved out, and I'm only paying $500/month, I'm not moving out. This becomes a deadweight loss, and that's the least of all the problems. As well, if the landlord is throwing ultimatums and causing problems for me, I'm stuck because I can't afford anywhere else. And, it reduces alternatives available because builders don't build when they're going to be rent controlled. You may say no room is left, well yes there is. It's called building up

            Yes, some policies skew supply and demand, but nothing as blatant as rent controls, or any price controls. Policies such as subsidies and taxes, they do not rise to this level as they still allow movement toward the equilibrium. This alone does not justify them, but they do not rise to the same level

            Rent control has many losers and few winners. Those looking to move into the neighborhood, landlords, those wishing to move due to poor service, and more are losers. The only winners are those on the inside looking out, and would not move even if prices everywhere were the same, but even that misses the point. No one has a claim to another's property. A landlord does not exist for the tenants' (or anyone else's) sake

    •  Oy vey ... same old bullshit arguments ... (3+ / 0-)
      Recommended by:
      eugene, Pd, justiceputnam

      You wrote: "Since people do not leave rent-controlled housing, the normal housing turnover is reduced."

      Oh God, is it so terrible that we have stable communities?  That tenants put down roots in the area, and care about the neighborhood as much as homeowners do?

      •  If you want stability, BUY. (2+ / 0-)
        Recommended by:
        VClib, Taunter

        Renters who demand rent control are like investors who demand high profits and low risk. One or the other.

        •  "Let them eat cake" ... (5+ / 0-)
          Recommended by:
          tmo, eugene, Pd, justiceputnam, coquiero

          Have you looked at how expensive it is to buy in California?  I bought a condo ... and could only afford it because of a very generous first-time homebuyers program by the City and County of San Francisco.  And I am now paying through the nose on mortgage payments.

          I can only IMAGINE how much worse it would be if I didn't get that help.  Your statement is the most ridiculous, disgusting and condescending piece of crap I have ever heard.

          •  So you want a luxury good that I can't afford (2+ / 0-)
            Recommended by:
            VClib, Taunter

            and it's NOT FAIR that you can't have it, so other people have to pay for it?

            Not everyone can live anywhere they want. It isn't a human right to live in Atherton, CA or Manhattan. Move to EPA. Move to Brooklyn. Stop demanding that others subsidize your choice of trendy neighborhood.

            •  typo: that *you* can't afford. nt (0+ / 0-)
            •  OH JESUS CHRIST!!! (4+ / 0-)
              Recommended by:
              Pd, claudew, justiceputnam, coquiero

              You sound exactly like Willie Brown, who said "if you can't make more than $50k a year, maybe you shouldn't live in San Francisco."  So now San Francisco is going to be a playground for the rich ... or the super-rich ... while the rest of us commute from the East Bay and have to look over the drawbridge???

              Saying "those people" should "just move elsewhere" is the epitome of elitist condescension ... and I resent it!!

              •  Pender is right (0+ / 0-)

                Paul, I know this may be a weird concept to you, but one's landlord is not one's slave. Before I go any further, I should say I accept the premise that things like the minimum wage and progressive income tax (within reason) can exist in a capitalist system without shutting off its power, but rent controls cross that line.

                Landlords do not exist to sacrifice themselves to tenants. You do not have a right to someone else's property, and rent controls accept the notion that you do. Landlords are under no obligation to own the units or to rent them out. People will do something for any of 3 reasons: self-interest, love, and brute force. The whole premise of socialism (therefore rent control) attempts to replace self-interest with love, and when that isn't sufficient, brute force is used, and that rarely works out for anyone.

                I know, rent controls must allow landlords to make a fair return on investment to be constitutional, but that still misses the point. Providing rental housing is a GOOD thing, we want to encourage it, not discourage it. The lower the allowed profit, the less appealing it is, and the less housing will be provided (even if land is exhausted, there's a thing called building up, which is something people against sprawl should be well aware of). You make prices artificially low, the less of whatever it is will be available than the market is dictating, and the total amount of consumer and producer surplus is less than otherwise.

                But even all that misses the point. The only way for rent control to have any effect is to require landlords sell it for less than it's worth. That is a forced transfer of wealth from the landlord to the tenant, and to pay that transfer, the landlord may end up doing things he/she otherwise would not do to pay the tenant. Doing things to pay someone else that you otherwise would not do is called slavery

            •  The fact that (2+ / 0-)
              Recommended by:
              Paul Hogarth, coquiero

              You consider having a roof over your head in a neighborhood close to work a "luxury" speaks volumes about your values.

              •  Center-city SF and NY are *luxury neighborhoods*. (2+ / 0-)
                Recommended by:
                VClib, Taunter

                It's no more a fundamental human right to be able to afford a house in one of the most desirable neighborhoods in the world than it is to be able to afford a Porsche.

                If you can't afford it, you could (a) move and commute, or (b) move and work elsewhere. If enough people choose (b), salaries for truly indispensable professions will inevitably rise so that people will be able to afford housing at the fair market price.

              •  Nothing to do with that (0+ / 0-)

                it's a necessity, that's not the question. The question is whether need is a claim, and it isn't.

          •  Imagination (1+ / 0-)
            Recommended by:
            Pender

            Why do you think it was the particular price you paid, and not higher or lower?

            You paid what was necessary to clear the market.  The benefit from the homebuyers program was captured by the seller, not you; if the program had been less generous or nonexistent, the seller would have received a lower price (either from you, because you would have bid less, or from the cover bid, who would have been the clearing bid).

            It is perfectly fine not to understand economics, but recognize your limitations.  Advocating rent control (except in the narrowest sense of "it benefits me, I like it") is fairly similar to insisting in the face of all geologic evidence that the earth is 6,000 years old: make sure you have a truly novel argument, because there is a world of analysis on the topic and it all points one way.

            •  I don't believe I advocated rent control (0+ / 0-)

              but thanks for the condescending reply.

              "It is what it is."

              by coquiero on Mon Jul 13, 2009 at 01:25:14 PM PDT

              [ Parent ]

            •  Are you that naive?? (0+ / 0-)

              You wrote: "You paid what was necessary to clear the market.  The benefit from the homebuyers program was captured by the seller, not you; if the program had been less generous or nonexistent, the seller would have received a lower price (either from you, because you would have bid less, or from the cover bid, who would have been the clearing bid)."

              Ummmmh ... NO.  It would have been sold to someone else who has more money than me.  I tried downbidding the price ... but the seller was quite resistant to that.  Fact is, millionaire developers can afford to keep a condo vacant until someone with the means to pay the asking price comes around.  I would not have had a home without that program ... end of story.

              •  Naive (1+ / 0-)
                Recommended by:
                Pender

                If owners who were looking to sell could hold on their asking price indefinitely, prices would never decline.  The Case-Shiller index should put that fear to rest.

                You may not have had the specific unit without the program.  But you were the high bidder, which means that without your participation, the owner would have had two choices: (a) sell for a lower price to someone else; (b) eat the time value of money and hope someone came in with a higher price at a later time.  Either way, the seller captured the value of your extra buying power.

                •  It's been over a year, and ... (1+ / 0-)
                  Recommended by:
                  coquiero

                  ... we still have vacancies in my building (which was new construction.)  Meanwhile, there are homeless people in my neighborhood sleeping in the streets.

                  The "free market" you laud so much is sick.

                  •  Which part? (1+ / 0-)
                    Recommended by:
                    Pender

                    The homelessness issue is tragic.  It is particularly tragic that San Francisco tolerates homeless people sleeping in the streets, and does not force people to go to shelters.

                    However, the vacancies in your building are exactly what is supposed to happen.  The owner is welcome to clear the market by dropping prices, or he can hang on and hope things turn around.  Evidently he has chosen to hang on and suffer the carrying costs and cost of capital.  Other owners have made different decisions and sold their units at prices lower than they initially expected.  Either way, that's the point of the free market: the owner pays to build the unit and chooses when and for how much he will sell it.  The buyer chooses when and for how much he will buy it.  If there is an overlap, there is a trade; if not, no deal.

                    •  Your "theory" discounts reality ... (0+ / 0-)

                      ... in the sense that there are real-world consequences to the free market theory.  Some people get housed, but others don't due to the greed of developers.  Sure, a developer can "take a loss" by keeping an apartment empty by hoping that eventually the market will rebound.  But not everyone has the disposable means to do that ... meanwhile, that apartment -- if the market was truly "free" and the invisible hand of Adam Smith brought down prices -- is empty, while there are homeless people sleeping in the streets.

                      I take this shit seriously, because I work in the affordable housing non-profit sector ... and I see what happens in you Randian world to those at the bottom ladder of the economic strata.  It's not theory ... it's real concrete consequences.  You get housing, or you don't ... and sleep in the streets.

                      As for "forcing" people to stay in shelters, I'd recommend you stay in a homeless shelter for a night ... and then you'll understand why so many homeless people try to brave the elements and hope they don't get arrested for sleeping.

                      •  Greed of developers? (0+ / 0-)

                        First of all, if you think developers are greedy for wanting higher rents, then tenants are greedy for wanting lower rents. But, you're confusing "greed" and "selfishness." BIG difference. Selfishness is refusal to sacrifice yourself to others. Greed is demand that others sacrifice themselves to you.  

                        We shouldn't have a minimum rent anymore than we should have a maximum rent. The landlord should not be forced to offer a lower rent just to make the tenant happy anymore than the tenant should offer to pay a higher rent just to make the landlord happy.

                        You are suggesting the landlord be forced to rent it out for less than it's worth, that's greed. It's demand the landlord sacrifice him/herself to the tenant. The property is the landlord's, and it's his/her right to decide how much to rent it out for, and if the tenant does not wish to pay it, the word "no" exists. "No, I can find a better deal elsewhere." Might I add, with rent control, it becomes harder to find a better deal due to less housing availability

              •  So? (0+ / 0-)

                It would have been sold to someone else who has more money than me

                Why are they obligated to sell to you? Why don't they have the right to find the best deal for themselves, just as homebuyers and tenants do?

      •  Again, misses the point (0+ / 0-)

        Oh God, is it so terrible that we have stable communities?  That tenants put down roots in the area, and care about the neighborhood as much as homeowners do?

        1. Are you seriously implying rent controls are the only way to have stable communities? If stable communities is your goal, we can do it in many other ways that are not as infringing and imposing as rent control. It's not the landlord's job to provide for stable communities
        1. It's not stability anyway. Your idea of stable communities makes as much sense as forcing tenants to stay put in the name of stability, and the impact is practically the same. I wonder what happens when the seller has a captive audience... oh I know what does, it's what happens with a monopoly: inefficiency, deadweight loss, lower quality of life.

        TANSTAAFL

    •  Taunter you are right (2+ / 0-)
      Recommended by:
      1BQ, Taunter

      It makes no sense to ask one small segment of taxpayers, owners of apartments, to subsidize rents for everyone rich and poor alike. Any rental assistance should be need based. There is nothing fair in City-wide rent controls laws.

      "let's talk about that"

      by VClib on Mon Jul 13, 2009 at 12:08:39 PM PDT

      [ Parent ]

  •  I briefly lived next to Mayor Moonbeam (1+ / 0-)
    Recommended by:
    Paul Hogarth

    place while temporarily staying at a friend's loft in Jack London Square.

    Jerry has definitely been a mixed bag over the years. I don't think he or Newsom deserve to be governor. I was hoping Garamendi was going to run for governor, but I guess he lost when they were dealing out the charisma points.

    So, I'm a bit at a loss about who to support in next years election. Too bad Schwarzenegger won't do a Palin and let us see what Garamendi would be like as governor.

    "be a loyal plastic robot boy in a world that doesn't care" - Frank Zappa

    by Unbozo on Mon Jul 13, 2009 at 11:46:54 AM PDT

  •  See San Francisco Earthquake of 1906 (0+ / 0-)

    As an example of how the market works fine without rent controls messing it up. A major earthquake hit San Francisco, decimating the population and housing. What happened? Prices for the remaining houses went high, attracting more investment to revitalize the area due to the high profit margin, increasing supply which led to a downward pressure on prices, and the market returned back to normal.

    What does economics predict would have happened if rent control was used in response to the high housing prices right after? Maybe those who got a house after the earthquake would have had a better deal, but less investment would have been attracted, thereby keeping the area without as many homes, causing more homelessness and far bigger problems

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